Long-term commitment: Australia and East Asia<\/p>\n
This is the first of two articles based on a speech delivered
\nby Australian Minister for Foreign Affairs Alexander Downer at a
\nmeeting of the Indonesian Council on World Affairs and the
\nIndonesia-Australia Business Council in Jakarta on July 9.<\/p>\n
JAKARTA: Australia is committed to standing by Indonesia, its
\nlargest and most populous neighbor, in these troubling times
\nbecause its prosperity, stability and security will always be
\ninfluenced by Indonesia's.<\/p>\n
We are encouraged by the steps the Indonesian government has
\ntaken toward political reform.<\/p>\n
It is up to the Indonesian people themselves, and not
\nforeigners, to determine the precise format and content of
\nreform.<\/p>\n
The Australian government is committed to work with the
\nIndonesian government in its process of change. It is clear that
\neconomic and political reform must go hand in hand -- one leads
\ninevitably to the other.<\/p>\n
The Australian government is encouraged by the commitments the
\nIndonesian government has already made to reform its economy to
\nmeet the challenge of the financial crisis, and will assist in
\nany way it can to move the process of reform forward.<\/p>\n
We have, for example, already led international opinion by
\narguing forcefully in Washington in favor of the economic reform
\nagenda Indonesia has agreed with the International Monetary Fund
\n(IMF). At those meetings I said that the reform program needed to
\nbe implemented flexibly and sensitively, bearing in mind the
\nimpact on those most vulnerable in society and recognizing
\nIndonesia's individual circumstances. The IMF has understood this
\nimperative and this is reflected in the latest IMF program.<\/p>\n
Australia is aware that the international markets are looking
\nfor continued implementation of the IMF program in a steady,
\nthorough and credible manner. For our own part, Australia will
\nmaintain its commitment to the second tier funding support for
\nthe IMF program, including the early advance of US$300 million
\nfrom our total $1 billion commitment.<\/p>\n
The links between Australia and Indonesia are enduring and
\nvaluable to both sides, despite the inevitable effects of the
\nfinancial crisis.<\/p>\n
The latest statistics for the 11 months to May 1998 indicate
\nthat our total exports to Indonesia have fallen by 14 percent.
\nHowever, Indonesia's exports to Australia grew by 45 percent, to
\n$2.46 billion, reflecting the increased export competitiveness
\nwhich is one of the few benefits from the sharp depreciation of
\nthe rupiah. The imbalance in trade between Australia and
\nIndonesia, which is less important than global balances, is now
\nfirmly in Indonesia's favor.<\/p>\n
Investment links have grown strongly in recent years.
\nAustralia is currently the eighth largest foreign direct investor
\nin Indonesia. Australian investment is expected to increase
\nsharply once Australian companies have factored the new
\ninvestment opportunities available in Indonesia into their
\nbusiness plans.<\/p>\n
At the government level, links in economic cooperation are
\nalso strong. The Australia-Indonesia Ministerial Forum, which
\nmeets every two years, provided a forum for their governments to
\ncoordinate economic policies in order to provide a better
\nenvironment for bilateral business. This mechanism has proved its
\nvalue in the last four years.<\/p>\n
Links between eastern Indonesia and Australia have been the
\nspecial focus of the Australia-Indonesia Development Area (AIDA),
\nwhich Coordinating Minister for Development Supervision and State
\nAdministrative Reforms Hartarto Sastrosoenarto and I launched in
\nAmbon in April 1997.<\/p>\n
We are funding several studies into the investment
\nenvironment, which is undoubtedly changed in some positive ways
\non the Indonesian side, by economic reform and the increased
\ncompetitiveness of export industries. We are also assisting with
\ntraining in key industries in the AIDA region.<\/p>\n
Australia is opening six honorary consulates in Indonesia
\n(including four in the AIDA region) to facilitate increased
\npeople-to-people contact between the two countries.<\/p>\n
Australia continues to assist Indonesia through a development
\nassistance program. Australia has been a development partner with
\nIndonesia for more than 30 years and contributed substantially to
\nthe great progress made in that time. We are adjusting our
\ndevelopment program to reflect changing needs, in close
\ncooperation with Indonesian authorities. To use an Australian
\nvernacular expression, we are doing this in the spirit of
\n\"regional mateship\".<\/p>\n
Australia's humanitarian response to help Indonesians
\ndisadvantaged by drought and the financial crisis now totals
\naround $50 million. This is in addition to our $1 billion
\ncommitment to Indonesia's IMF package, and our contribution so
\nfar of approximately $900 million in trade insurance cover.
\nAustralia's total budgeted aid flows to Indonesia will increase
\nfrom $89 million in 1997\/1998 to $108 million in 1998\/1999.<\/p>\n
I just signed with Minister of Foreign Affairs Alatas a
\ngeneral agreement on development cooperation. I have also
\nannounced a program of activities designed to promote economic
\nmanagement capacity and reform. The program, which will involve
\nassistance of up to $70 million over three years, will cover such
\nissues as the reform of state-owned enterprises, bankruptcy and
\ncommercial law, foreign investment, trade policy and capital
\nmarket development.<\/p>\n
On East Timor, Australia has for many years recognized the
\nintegration of the territory into Indonesia. We would like to see
\nan early reduction in the military presence, a dramatic
\nimprovement in human rights and a situation in which the East
\nTimorese people manage their own internal affairs. We welcome the
\nemergence of a dialog as illustrated by the meeting between
\nPresident Habibie and Dili Bishop Carlos F. Ximenes Belo.<\/p>\n
There is a long row to hoe. However, constructive dialog can
\nlead to a solution to these painfully difficult issues. Ali
\nAlatas, a world-class diplomat, needs the opportunity to achieve
\na solution in East Timor. We stand ready to help him, the
\ngovernment of Indonesia and the people of East Timor.<\/p>",
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